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Whether we are left with the Fiscal Cliff or a Grand Bargain, workers
in the U.S. face massive cuts to programs such as Medicare, Medicaid,
Social Security, unemployment insurance, Food Stamp assistance and
other needed social safety nets. This is an example of “austerity” which
has largely been pursued in the U.S. until now, on a statewide and local
level.
The policies of austerity are not unique to the U.S. They are being
enacted internationally. In Europe they have been aggressively put into
play for four years. While austerity has been pursued on all continents, this
article will focus on Europe and the U.S.
What are the policies of austerity? They involve the cutting of public
investment and services such as education, health care, and retirement
insurance. In addition they also include the privatizing of existing
government assets. Public employees suffer wage freezes or cuts and mass
layoffs as part of austerity measures. Labor laws are revised to empower
employers at the expense of employees’ job security, wages, benefits, and
voice on the job. And austerity also involves increased taxes and fees on
working class people.
Austerity is sold as the only available means of reducing the debt.
However, there is plenty of money to take care of these financial
imbalances. It is in the pockets of the wealthy and big business elites
whose think tanks and politicians are, not coincidentally, the architects of
austerity. They want nations’ economies to be run more like the
corporations and banks, prioritizing that their shareholders get paid first
and foremost at the expense of everyone else.
In Europe the level of debt is 87 percent of its collective GDP,
necessitating a severe approach, according to their outlook. However, in
the U.S., which is in the beginning stages of an austerity campaign, the
level of debt is over 100 percent of our GDP. Considering this level of
debt and the size of the U.S. economy, the largest dose of austerity
measures are yet to come, and it will be working people who will be
expected to swallow them.
Austerity and Recession